Barbarians

“This market is collapsing.” Not every day that you hear those words sliding out of a real estate agent, since most know only six words: ‘It’s a great time to buy.’ Not for Sam Wyatt. This, he’s telling the denizens of Vancouver’s flush Westside, is the time to bail.

He’s right, of course. Supply is overwhelming demand, and the victim will be price. The stats don’t lie. The average number of detached listings in the hood over the last three years was 589. In the darkest days following the GFC, when panic cause a wave of selling, active listings never exceeded 1053. But today there are almost 1,100 houses for sale. Says Wyatt, “This is a very serious situation.”

As you may know, there’s now a 10-month supply of houses for sale in what was the hottest market in the land a year ago. Below five months is a seller’s market. Between five and eight is that mythical ‘balanced’ territory. Above that, barbarians storm the gate.

As Wyatt told me last night, “I see this moving towards a 40% drop in prices, perhaps even 50%. The smart money is getting out now, but well down the road we’ll be seeing a massive buying opportunity.”

By the way, across the ditch in Victoria – another of the highest-priced cities in Canada – things are no better. Last year saw the lowest raw sales number for detached homes in 27 years, and now prices have started their inevitable slide. Down 6% so far. Just the start.

Blog dog Adam put this in some context for us:

1) June 2011 – A couple decide to buy a home in Victoria. They buy an average house for $629,292. They put 5% down, and pay a CHMC fee of $17,305. They also pay a land transfer tax of $10,585 and buyer conveyancing fees of $1,500. Total investment is $658,682.

2) June 2012 – They are forced to sell the home. They sell the house for $591,464 (average price). They also pay $19,286 in realtor fees (BC standard of 7% on first $100,00 and 2.5% on balance) and $900 in seller conveyancing fees. They walk away with $571,278.

A loss of 13.3% or $87,404 in just 12 months for the typical home in Greater Victoria – and that’s just with a 6.1% drop. Vancouver is already down 14.1%. As you say, “this isn’t going to end well”.

No, it’s not. And this is no BC-only story. The pressures are the same in all major cities. Only the timing will be altered. Not only are Westside sales tumbling, but even in 416 demand areas where listings are far lower on a per-capita basis, bidding wars have all but ended and asking prices are no longer merely opening bids. Staggering debt levels, even among the well-heeled, combined with a flaccid economy, are doing the job.

But this is just half the story. As this pathetic blog has recounted with numbing, fingernail-pulling repetition, Ottawa’s new war-on-the-house is attacking virgin buyers at the same time the top end wobbles. By chopping amortizations down to 25 years, offing cash-back loans and making mortgages harder to score for newbies, all those condo boxes and townhouses made of cornflakes just got less affordable. As sales of multiple units at the lower end of the market take a big tumble, there’s a whole generation of move-up buyers who will end up staying put. The trickle-up theory of real estate, built on the ramparts of escalating debt and eternal horniness, is suddenly kaput.

Meanwhile, especially in VanCity, another cloud.

“One of the most influential elements of the Vancouver West real estate market has been the large proportion of sales to foreign buyers, particularly from China,” says Wyatt on his web site. “From a purely anecdotal point of view, the number of these sales has significantly diminished.

“We have been in a “top-down” market were the sale of the most expensive real estate has driven up prices in the rest of the market as sellers have opted to down-size or move to less costly neighbourhoods. By moving into lower price points, the sellers of higher priced real estate were able to drive up prices because they were relatively flush with cash compared to those making lateral or up-size moves. As a result, the closer to the entry level of the market, the fewer gains were made. Gastown apartments have made little price gains if any over the last 3 years while detached homes have nearly doubled. When houses prices fall, the rest of the market will almost certainly follow.”

What does this all mean?

An unhappy confluence of factors for real estate equity. Amassing listings and falling sales at the top, with vexed virgins at the bottom. The result – equally in Toronto, Calgary, Winnipeg or Vancouver – will be a steady increase in listings over the second half of the year, and mounting downward pressure on prices. For people who need to sell, or are smart enough to cash out near the top, this is the moment to do so. But get the right price, or your listing will die of old age.

For buyers, wait. With every week that passes, your power grows. A classic mistake is buying on the first plunge, when there’s a long slide that comes after.

Some amendments to over 70 laws:
-trimming benefits for the old and unemployed
-cutting fisheries protection
-curbing government oversight of the federal -intelligence agency
-limiting environmental reviews of big natural-resource projects
-tightening some immigration laws and allowing American officials to arrest Canadian citizens in Canada

Can you believe the last one?

Though the prime minister once campaigned as a crusader for accountability and openness, he has acquired the habit of secrecy. In April the auditor general accused the government of misleading Parliament about the cost of an order for F-35 jet fighters. The parliamentary budget officer, an independent watchdog, is considering going to court to force the government to release details of job and service losses in the budget’s C$5.2 billion ($5.1 billion) of spending cuts. The courts are “perhaps the only institution of accountability this government does not seem prepared to harass, intimidate, ignore or roll over,” wrote Andrew Coyne,

Given the incredible amount of increase and number of years the market has moved up, it will take a 40 percent correction in Vancouver for it to make sense or be affordable for people who are renting. This will probably take at least three years.

Garth,
Earlier in the week you said this:
“Take your cash and divide it between funds giving equity exposure (Canada and the US), dividends, REITs and bonds. And stay tuned. I’ll come back to this topic later in the week.”
You’re running out of week.
Not quite. — Garth

As Wyatt told me last night, “I see this moving towards a 40% drop in prices, perhaps even 50%. The smart money is getting out now, but well down the road we’ll be seeing a massive buying opportunity.”
__________________________

There is massive opportunities in the south. So what?

When the dust settles down, all the equities, i.e., wealth are wiped out, then no purchasing power left. Even if you are able to buy 50 cents on dollar, if no body buys it from you, then it is still 50 cents on the dollar.

The last 30 years are leveraging up. Who knows what awaits in the next 30 years.

By the way, I heard there are also massive buying opportunities in Spain, Irland. Go buy one!

The leafy Victoria suburb where I walk my dog is turning into a bit of a ghost town…Four vacant houses out of 40 on the Dog Walk Index (DWI). 10 for sale or recently withdraw from sale. Total “value” (according to the listings) a little shy of 25 million.

In this suburb, up until a couple of years ago, you might see three or four sales of the 200 houses within the Gates.

I was talking to a guy from BC Assessment and he told me that a) the last house to sell in the neighbourhood sold at a 20% markdown, b) that there is a lot of “silent” inventory at virtually every price point in Victoria.

Price will remain upside sticky until the actual panic sets in. I think that will take a while. Right now the smart money is listing but at 2010 prices. That will change.

As I write there is thunder, lots of it, but no lightening…that is coming.

A person’s buying power is influenced by a lot these days. With every week that passes, buyers can less and less expect to “eat popcorn on the sidelines” and then “jump into the fray” when the “moment” is right.

The trend of re-directing attention away from the world-wide monetary system when talking about Canadian real estate creates a stronger and stronger distortion of reality as time goes on.

An American tries to arrest a Canadian in Canada, he is gonna be eating his cornflakes through a straw.
Imagine a Canadian trying that in the Excited States?
Jeez, I am just choked.
Is this true?
Sovereignty?
Obama – who does he think he is?
Man, this ruined my weekend.

My neighbors haven’t sold yet. It’s a classic Victorian home in cabbagetown for 900000, but at the end of the day it’s a home on a 12 foot wide lot. Where are the buyers? Tight smiles and I feel bad because I know they are in a jam. And there’s this blog-addicted part of me that’s all MWAH hahahah! What kind of terrible woman am I turning into? Oh, and pass the popcorn. No, it’s too terrible to watch. Do you think I could snag it will a well timed sympathy hug and 600k? No! Someone stop me.

Architectural services – no one’s buying, so no one’s interested in the latest design fads,

Interior Decoration – no one’s moving, and people are finding out that it’s maybe chaper to stick with what they’ve got (or heaven forbid, learn to DIY??),

Removal / Storage services – for pretty obvious reasons.

All these and probably many more employ people, and with a reduced demand for their services, then the demand to employ is reduced also. Translates to pressure on wages (“if you want to keep your job here you’ll have to agree a salary cut”), and pressure on positions (“we can’t afford to employ you at all anymore”).

Increased un – and under-employment causes an increase in demand on Taxpayer funded services (not just unemployment benefit – also healthcare, especially psychiatric / psychological services), just at a time when revenue (from workers tax contributions) is falling, owing to the reduction in hours available to work nationally, and downward pressure on average incomes).

Toronto condo market could lost upto 70% of its value in this current housing crash. Mortgage brokers and sales agents have said the phones have stopped ringing. Realtors have been doing empty open houses as no one is showing up. Each week that sales fall will trigger defaults and bankruptcy. Can’t wait to hear realtor nonsense as they post all night and day with their Bs.

I read Sam Wyatt’s blog. Finally, a real estate agent who isn’t full of sh_t. He is pricing new listings under the competition. Go Sam Go! Drive prices down to reasonable. He climbed Everest in May. If he can do that he can do anything. But is he willing to put in 50% of asking bids?

They are the prudish and eccentric billionaires behind Hong Kong’s largest property firm who played a major role in transforming Vancouver’s skyline with a series of luxury condominiums. Devout evangelical Christians, they are the co-heads of a family business empire that is among the most powerful in Asia, but has also been plagued by vicious infighting and a bizarre kidnapping that caused a shift in control of a fortune estimated at more than $18-billion (U.S.). Now, brothers Thomas and Raymond Kwok are facing possible prison time after being charged with bribing one of Hong Kong’s top government officials in what is the biggest corruption scandal to hit Asia’s financial capital in years.

I’d turn off the lights and come back to this blog in 3 years. I would be a different world in Canada for real estate and the general economy. For a snap preview, move your eyes and ears south of the border and watch / listen.

Yes in 416 & Van I would NOY buy at today’s prices.
Wait it out, prices WILL melt down. How far, is an unknown. Renting as cheaply as one can afford to, or perhaps moving to another community with more normal RS (Windsor, anyone) is a possibility. When prices melt far enough you will know.

Here in Cow Country where I am, prices have melted about 12% from their top, but our “top” was never that crazy.
At today’s prices I could replace my home NEW on similar land for just under 200K. Land prices are a huge input cost in a build. The building itself varies not much by location.

IF Canadian RE melts 15% overall, and 50% in Van and 25% in 416 the result is still a high price relative to where
I am located.

Earnings are usually relative to other costs i.e, housing.

Expenses too. However, if you fall for the crapola on the tely which says you deserve a new car etc etc you will likely be forever broke, and in DEBT.

You don’t deserve crap, until you can pay for it in full when you buy it. Yes, yes, strange concept, but no buyers remorse. A home and a car on a 3 yr note would be the only exceptions to this rule, both with a minimum 20% down.

IF you wish a good life, you must be willing to do a few things.

1. Earn an average, or better salary.

2. Save for both retirement as well as major purchases.

3. Have a decent emergency fund (3 months earnings minimum, or about $10,000).

THEN we can talk about saving for a home. This is usually your single biggest purchase. Never be in a hurry to buy this one.

A car, well, that’s a consumable in my world.
I’ve owned 19 new and 43 used in my lifetime. I made my living on the road. Haven’t bought a ‘new’ one since 1994
they go down in value too fast. Some I’ve kept a coupele hundred thousand miles, others were lemons and dumped quick quickly. RE I’m on home number 6 now. Moved 16 times in my career, and we were not afraid to rent at times. Timing, and circumstances dictated what was smart. Nothing new on that front is there?

For the past few posts I have read a lot of gloating. Fine I get it. The market is collapsing. You told us it would. Good for you. How about some real advice. It is all and well to say don’t buy a house the market is going to collapse before it happens. Not nice to gloat when it does. So for those who listened, sold, rented etc. Now what. Get on with it man. I’m almost done with this.

If Canadian housing prices really are dropping, it would be wonderful if the Feds do NOT meddle like they did in 2009. The Cons are supposed to be laissez-faire free marketeers so this should not be much to ask. F and C have given Canadians lots of verbal warnings to reduce their debt levels and people have had ample time to prepare.

There are lots of people (myself included) who are waiting to buy a home when prices return to normal levels. Therefore, there is no need for the gov’t to support housing prices. Just let nature take its course.

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“Staggering debt levels, even among the well-heeled, combined with a flaccid economy, are doing the job.” — There are well-heeled sheeple? Strewth! I figured they were the smart ones!
*
#110 John G. Young — “A person’s life can change forever in an instant.” and Garth’s — “This market is collapsing.” — Like these?

Similar to the situation in the Kootenays. People were enjoying their lives but then, in less than a few seconds, everything changed. With t’storms headed up our way for the next day or two (incl. the Kootenays), the rain will make the ground very unstable. That is one of the whole points of life — it is all very unstable, and nothing lasts forever.

people in the know trying to make heads or tails of this crash should not lead somebody to believe we have seen this all before. We simply have not (at least not where real estate is concerned). This is the collapse of a real estate bubble and not just any real estate bubble but one of the largest in the world and certainly the most horrendous in Canadian history. There will be no quick fix for this. Anyone presently taking a position in real estate in the hopes of weathering the storm would be well advised not to do so (in general). It is likely much to late to change positions now in any event. All the best to everyone. REALLY (even Market BULL and Smoking man) good luck everyone (I know I will need it). The age of the 100k a year high school grad is coming to a close and the age of the PhD convenience store worker is well underway (nothing wrong with working in a convenience store, been there done that).

Look for more house fires as the housing crash gets worse. Another home went up in flames and the second in two days in the GTA as people try to burn their house down. Look for more “fires” as the housing crash gets worse. The RE industry must be very worried. I expect upto 50% crash in the GTA as the ponzi scheme comes crashing back down.

sorry ,fingers slipped.anyways i have driven all over richmond.(bopeep land).so many new housing starts everywhere.seems like for every new start there is already a new home for sale.oh a new mcmansion just got torched last sunday.lock up stage,they think it was arson.

Regarding US real estate, That Warren Buffet guy is affecting RE big time. Friend was in Central california last week… farmland going for $15,000 per acre. In 1990, it was $200 per acre (yes). In abbotsford, it is $100,000 per acre…go figure what the correctin willl be…

Drove through Conestogo recently. Lots of “For Sale” signs up. The houses belonging to one the two RIM “Execs” that got canned after the flight mishap looks strangely empty– coincidence? I think not. Nobody was in the house. Bank probably doesn’t want to sell given the high # of houses for sale in Conestogo.

For anyone that’s not from the KW area, Waterloo in particular, Conestogo is a little town of about 2,500 just north of Waterloo. Coincidentally, it’s turned into a “RIM Village” right around the mid-2000’s; lots of cocky RIM execs moved in and bought huge palatial mansions (3,000-5,000 sq ft). It’s very close to RIM’s North Waterloo campus, about a 5 minute drive. Anyways, it looks deserted as of late, with a vast number of properties for sale. The prices are schizophrenic to say the least. For example, a small (1,900 sq ft) bungalow is trying to fetch $760K,

Given the relatively low value of land in Conestogo (RIM is currently the only employer, once RIM goes bankrupt, there will be no empoyers what-so-ever), it is delusional. There is one school, some random stores; besides that, there is nothing in Coestogo. It is farmland. Drive East or West a few minutes and prices drop 50-75% easily, if not more. Cocky RIM executives it the ONLY reasons Conestogo prices are 200-300% higher than surrounding areas.

Waterloo Real Estate is about to be chopped at least 50%. Laurelwood, and Conestogo, probably 60-70%. That $760K bungalow will likely sell for low-mid $200’s like similar bungalows a few minute drive away. That’s a 70% chop.

Anyways, just an update from Waterloo. God bless your soul if you own real estate in Waterloo.

Why don’t you ever talk about regular dividend stocks. Perferreds are great if you’re retired and want steady income with low volitity but for everyone else a good portfolio of regular dividend stocks BCE, POW, CIBC will not only provide income but over the long haul very good dividend growth. My Dad started at age 57 with boring old Bell and 30 years later left an estate worth almost 7 figures all dividend stocks and no preferreds.

Let me open up a huge can of worms here. Every year all the animal rights activists go absolutely batshit crazy whenever there is a crash at chuckwagon races. The common belief is that people are profitting from the “cruelty” of those poor dear horses.

Fact 1) No one cares for the wellfare of the race ponies more than their current owners. They are properly cared for year round, not when it is politically adventageous (week of stampede.)

Fact 2) 95% of these ponies are rescued thoroughbreds in the first place that would be sticking your wallpaper to the wall years ago if it wasn’t for their current owners, who rescue these animals in record numbers.

Just my two cents, from a farmboy who has cared for horses his entire childhood, as opposed to some city slicker who pays to stable an animal until boredom sets in , then neglect follows.

Garth, I had the exact same conversation with one of my neighbours last night. I was just sitting on my porch, having a non-alcoholic margarita, watching the MILF’s hustle home from work, listening to Britney Spears’ Greatest Hits, chatting up nannies in Tagalog (that’s Filipino for you yolkles who live in Small Town Canada, population 100k inbreeds) when I noticed this guy, my neighbour, hammering in one of the Remax “For Sale” signs in his front yard. I sauntered over and asked what the deal was. He said that he’s selling the house and planning to rent for a while. “Why would you do that?” I asked. “I think the market is in for a bad correction and I’m retiring in a few years.” I thought to myself “Damn these old people, they are the most timid generation of all time! They were in diapers for the first 3 years of their life and will probably be in diapers for the last 3 years, if not more.” What’s going to happen to the neighbourhood when all these boomers put their houses up for sale but no one can buy them because of stubbornly high prices and tight-ass lending conditions? All the houses here will end up as rentals with Hipsters and large families moving in. Property prices are going to drop, crime (fashion ones, at least) will go up and I may not get to enjoy nights like these with Britney, the MILF’s and Filipino nannies. I wanted to tell him not to panic, don’t be a lemming running towards a cliff, but then I thought this may be the best possible time to make the moves on his wife.

This blog is pure BS. On your 5th year repeating the same crap, Garth, that is when you are not mimicking dear Abby. You are a joke. All your past predictions were wrong and are now great entertainment!
Thanks for the laughter old man!!!
Cheers!

My feeling of schadenfreude for those who put all their wealth in a house was premature when I realized moving a family friend into assisted living home and found out he was counting on the money from home sale to keep going . If no big cash from his house sale means we all pay for this lost of wealth in housing even those of us on the outside watching the fall of equity in homes.Why because the government will be the finally caretaker of these old boomers and where does the government get their money .Ouch

#7
“tightening some immigration laws and allowing American officials to arrest Canadian citizens in Canada”
-under Canadian supervision and we can do the same in the states under American supervision.
Give the whole story if you want to slam Harper.
Maybe stick to the purpose of this blog, even.

Harper has made the Economist: “Voters may be tired of the prime minister’s bullying:
-tightening some immigration laws and allowing American officials to arrest Canadian citizens in Canada.

I’m an American and having our police, way, way, out of their jurisdiction just makes my blood boil and my eyes to squirt puss. Any America COP who would go along with this scheme, no matter how well intended, is beyond my comprehension.

With today’s communication technologies a hot pursuit situation can easily communicated to an officer of jurisdiction no matter which way the criminal is headed.

What’s next? Are we going to have Russian Military Police arresting folks in Anchorage or Whitehorse?

For those patient sideliners eating popcorn and waiting to buy. Let’s have a look at that supposed “buying power”.

You didn’t play a rigged table, so you kept your chips. You “played” the right tables in Global Canadian Casino. You “earned” “equity” and “net worth” by “making” “smart” “decisions”.

Ahh the power of language to confuse. A little clarity is welcome.

Let’s assume someone’s not cleaning the washrooms at the casino and you start to realize there’s a stink in the casino. Where do you investigate? The washroom? Forget it, the door says “kitchen” on it.

Doomer sites? Nope. These are not healthy individuals and spin events for their own manipulative reasons.

You have to simply look everywhere, and use common sense….and filter, filter, filter. And then connect some dots simply to get at clues. That’s just to find out where the washroom is.

Most Canadian real estate dicussion is talking about free market and timing and banks and investments and on and on…exhausting and wholly innaccurate.

Look at gold. Think you can beat the casino with precious metals? Forget it. Plus, it’s the key fantasy of doomers. And an inaccurate one. Perhaps there is some protection, but it doesn’t paint the real deal.

A non-doomer site ( UK Telegraph) did an article some have seen on Gold. Back in 2002 Gordon Brown blew out 400 tons of the public’s gold at 290 dollars plus or minus.

Why would he do that? The answer is connected intimately to the Canadian house ( since cheap rates drove much of the bubble).

Here’s the info from Thomas Pascoe of the UK Telegraph, but picked up by a doomer site. So here’s the doomer site. Filter, filter, filter. Dot connect.

The condition of real estate is only a symptom there is a far greater problem of credit expansion that has taken place over the past thirty years to keep the ball in the air… no biggy… just sucking the last bit of wealth out of the middle class in order to reset.

What is the mark of a barbarian? Barbarians find it easier to take, tax or plunder rather than to earn or produce. Barbarians also lack respect for gods laws and teachings.
The question is not who is a barbarian but who is not a barbarian?

Looking at condos here in Victoria. Many are empty and have been sitting on the market forever. Have an interest in one unit that has been on the market for one year. It’s price is following the market down.
Recent updates from a realtor show falling prices. Have been to a number. Of open houses. Nobody there.
This is a buyers market. Price your offers accordingly!

Real estate is proving to be an enormous millstone with an open-ended timeline vis-a-vis when the sale actually closes .
Unrealistic price points, taxes, fees, maintenance and job markets and wages which are completely out of line with prices are making RE a stupid buy in so many markets. For many, an unrecoverable financial error, as dumb money is getting thinner on the ground and greater fools fewer by the day.
We live in a world where, although an abode has its place, it is no longer the wealth producer of recent decades.
Jailing one’s present and future equity in a long-term, declining market is a mistake of the grandest order.
Being liquid, debt-free and nimble is the comfortable order of the future as this state will allow the individual to navigate the fiscal landscape with much greater ease. Being liquid and nimble will enable people to avoid market, government and social wealth decimators which, as we’ve seen over the last decade have wiped huge personal wealth from so many balance sheets.
For most, the best deal you might ever make is the deal you avoided.
If you cant buy at 30% – 50% discount now, wait.

We are a young family living in richmond hill. Home is mortgage free but in need of some renovation. I am 44 years old, the wife is 38 and the boys are 9 and 3. We would love to stay in the area, yonge and hwy.7 . I have a pension plan at work which should provide between $4800 to $5000 a month if I retire at 60. Wife has rrsps but no money in resps or other investments. A month ago we were offered $930,000 plus we could stay in the house for a year. My questions are: how long would we have to rent a place to make it worthwile to sell? The value of the home is almost entirely land value, so is it foolishness to spend $200,000 on renovations? would love to sell the house and have money to put in resp and other investments but I am wondering if is worth the effort because I would still want to own my own home at the end of the day.

Then you are a victim of your own emotion. The responsible action for your family is to harvest the profit. — Garth

The condition of real estate is only a symptom there is a far greater problem of credit expansion that has taken place over the past thirty years to keep the ball in the air… no biggy… just sucking the last bit of wealth out of the middle class in order to reset.

———————————————————-
Realtors are no more professionals then hookers. LOL Realtors are in an all out panic!

Just my two cents, from a farmboy who has cared for horses his entire childhood, as opposed to some city slicker who pays to stable an animal until boredom sets in , then neglect follows.

++++++++++++++++++++++++++++++++++

Spot on. From the latest report, it appears that the lead horse was dead from a heart attack/stroke/aneurysm before it hit the ground. The other two were victims of circumstance.

You’re right. Nobody cares for their animals as much as these guys do. It’s the usual horsey-set/Toronto/NDP mentality that the animal rights people go full stupid over.

I’m sure that the animal rights people pray for a trainwreck at the Stampede just so that they can get some airtime for their nutty views.

Just like the Global Warming nutjobs pray for a heat wave to get some free press (after they’ve worked on their tans at the beach).

Or the anti-oil nut jobs pray for a pipeline leak then pile into a 747 and hire a fleet of helicopters to “investigate”.

Or the sustainability nutjobs hold a massive 5-day conference in South Africa that includes importing limos from Germany because none of them want to stoop to using the bus.

Ot the World Wildlife Fund begins relocating and shooting people in Africa because they are in the way of their “ethical” palm oil plantations or wildlife reserves (where of course you can hunt elephants, giraffes, lions, zebras or whatever as long as you pocketbook is fat enough).

Lo Volume – get ready for low volume equity ramp or dump. Makes it easier for computers to lead the charge:

NYSE Takes Stock: Trading Down 40% in 2 Years
By Tom Steinert-Threlkeld
The not so magic number for NYSE Euronext in the first half of 2012: 1.8 billion shares of stock traded on its markets every day, on average.

That also was the average volume each day in June and each day in the second quarter. Consistent, perhaps. But down 2.8 percent from May, 14.7 percent from June of last year, and, for the year to date, down 17.8 percent from a year ago.

Its volume has dropped 40% in the past two years. In June 2011, average daily volume was 2.2 billion shares. In June 2010, 3.0 billion.

…………
Securities Industry and Financial Markets Association data shows a double-digit drop in average daily trading volume in the first six months of this year, across NYSE, Nasdaq, BATS and Direct Edge exchanges.

The drop averaged 14.1%, when the first half of 2012 is compared to the first half of 2011

Unfortunately realtors never lose out. They will make a ton of money from all the people desperate to move out now and sell. Granted, they will have to work a little harder (no more showing HGTV “I’ve shown you three houses, now which one do you want to buy.” But they will not suffer much. It’s the homeowners who will be taking the hits not really the real estate agents. Unless the sellers get smart and sell through Kijijiji or Craig’s list.

Stupified: these idiots believe someone will pay 1.6 million for a 4BR detached home…on Woodbine at Gerrard!! Maybe for another .6 million I could put the house on a truck and move it to someplace that wasn’t a complete shithole.

Like I’ve said, countries are a irrelevant, a myth. Think: Supra-national power. Check whose face is on the back of your coins.

Witness NATO’s latest multi country invasions.
US/Canada/Mexico may well be merged into one wretched, fetid, low-wage economic zone. Ditto, the EU.
Why not. Bring us into line with Communist Asia (China, Vietnam) and Africa. We think we’re special slaves?? I don’t.

Agreed the article points to selling real estate. But the financial analyst that put this piece togther shouldn’t be asked for advice. The joker includes an $1 Million insurance policy as an asset – and the person hasn’t even died yet. LOL>

Garth, What do you think about exiting the Toronto market and rent instead, and buying in the USA like Florida when supposedly the rental market is quite strong. We are within 8 years to retirement and already have a decent RRSP, RESP and TSFA, plus unregistered investment portfolio of dividend stocks, plus pension plan. Is a pre-tax return on investment, net of all expenses, of 6.2% decent? Thanks!

There are significant consequences to becoming an alien resident in Florida. — Garth

#59Dave in Calgary on 07.14.12 at 1:42 am
A lot of people upset about 3 dead horses. The good news is I heard the fourth horse is in stable condition.
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Horses have to earn a living too. Cruel hard facts about life.

I’m sure the elite have already divided the world into proposed Wage Zones (similar to taxi’s fare zones). With computer simulations predicing its outcome, and measures to take to control/sell the population on it.

Had enough? I should hope so. It’s all out in the open, should you care to look.

Solution? End the cycle of violence, free your mind.
That’s ALL we have, our own souls.
Like it or leave it. You can check out any time but you may never leave.

I am learning to relish the fact of my existance. Sure, we are all but one heartbeat, one foodless week away from death. But we have it good. Clean water, air, supermarkets overflowing with prepared food that is tossed out nightly.

T.O. Bubble Boy, thanks for posting that article. Couple of things that struck me. One, they are paying more than $18k a year in mutual fund management fees – I’ll bet they don’t even realise. And their biggest asset of all is life insurance policies. Weird, I don’t recall ever seeing one of these schedules of assets and liabilities that lists life insurance as an asset. Certainly it’s not useful for retirement purposes because you have to be dead to collect it (useful for one of the two people I guess). Also interesting to note they are already looking at a loss on sale of their investment property, and the correction has only just started.

At #7: Tim, this information is true. American officials CAN arrest Canadian citizens in Canada. Of course, there is more to it than simply an American showing up on Canadian soil and making an arrest. It must first be approved and supervised by Canadian officials.

On the flip side, did you know Canadian officials can do exactly the same thing to American citizens on U.S. soil, contingent it is approved and supervised by American officials?

THREE in every 10 households with a home loan are suffering mortgage stress. Figures provided by the Bureau of Statistics to The Sunday Age suggested a grimmer picture of Australians’ finances than had been painted by data released in recent weeks as part of the 2011 census.

Prices fell for the fifth consecutive quarter in June, which has so far wiped $45,000 off the city’s median house value in just over a year.

”Everyone thought the housing market would react positively to the 50-basis reduction in May, but that’s proved wrong. The Reserve Bank’s action, which was in response to negative international events, has just made people more cautious. They’ve been spooked and they are becoming more and more risk adverse.”

House prices fell 1.3 per cent to $555,500 in the past three months – and are now down 7.5 per cent from their peak – returning the city’s median value to a point not seen in more than two years.

In my hometown of Penticton, BC farmland went from 15,000 an acre to 200,000 an acre in less than four months in 05. So a 10 acre plot went from 200,000 to 2 million plus in four months. I wanted to farm I actually went to school to take a certificate course in Viticulture it was a three month course, guess what happened when I was in school? A real estate boom. So the seven other young men who were in the course with me, who were willing to put in the blood, sweat and tears to build their business. To stay in the community and farm and make a life out of it couldn’t do it. It didn’t make economic sense. I spent two winters up in Northern Alberta scratching and saving for that down payment only to have my future destroyed by rampant speculation and greed. That’s how I learned about housing bubbles.

The last I heard a Saudi Prince had bought a 100 acres near where I was looking at setting up shop. Hot Arab Money.

I hope the economy collapses, I’m one of those spiteful Millennials that truly believes people get what they deserve.

Just wondering if others have underwater expat friends and relatives in the US, on the phone almost begging to come home to Canada. Clearly in emotional distress from devastated pension plans or unemployment, trapped in their real estate investments and an American dream crushed by economic reality.
Perhaps hyperbole will become reality for many Canadians as well, during the hard landing and slow melt to follow.

#106
My question would be then what is the time frame in the gta for the valuations to return to the point were home ownership makes sense? Is it a 2 or 3 years proposition, or is it a much longer term situation says 5 or 6 years?

Even if you don’t invest in anything, you’ll be able to buy something twice as nice at the bottom for what you harvested. OR buy the same thing for half the price and invest the rest. And if you want to downsize? Hoo-whee.
Someone sitting in an Las Vegas townhouse bought for $85,000 in ’88 saw it soar to $280,000 at the market peak, only to plummet to $44,000 three years later and now crawling up to $64,000. There are five bedroom houses with pools in that neighborhood now for $135,000 cash deals. 1960’s tract ranch fixers yes, but at the peak these were in the $800,000 range.

Pity all fools who bought at peak and just walked.

Your bottom is at least two years away, and expect and don’t get suckered into at least three or more dead cat bounces. That’s human nature.

When the last bounce barely bounces and then starts dropping again, that’s when the bottom is finally near.

Your post is the clearest example of why the RE “industry” is so criticially important to the rest of Canada.

In fact just about 30 per cent of our GDP is tied up in this now solidly wretched business.

When we pin our hopes on speckers and young peoples’ dreams of endless granite, stainless and happy credit card-based sun-place vacations, we are headed for a stack of trouble.

CHINA…ITS PEKING DUCK IS DONE?

As if to add anxiety-ridden INSULT to actual upcoming economic INJURY, check out the following Website: “Also Sprach Analyst.”

On this date the Site’s home page will greet you with a huge number of graphs showing that China seems to be economically imploding right now. Statements of 7.6 per cent GDP growth seem like an old Chinese mirage painting.

This info is beyond scarey and BC residents, in particular, must take note.

Looks like plans for those three LNG ports up the coast in Kitimat won’t be happening any time soon, because there’ll be no one in China wanting the stuff in the short to medium term. In fact, the ports’ proponents are trying to roust up some business in Asia right now.

Instead of putting up with all that expense and crap, why don’t “they” just refine that guck in Alberta and pump it down existing pipelines to Canada’s Atlantic ports that can handle the stuff and ship to China?

However, the way things seem to be going there (China), the market for the stuff may not be quite what was originally thought, in addition, of course, to that LNG. Check out those graphics!

Flippers in a panic as they are starting to burn the houses down just like they did in the 2008 housing crash. The house of cards is coming down. Funny these `fires`never hapen during the boom time when flips sell. Realtors and everyone in the industry muct be all worried about their financial situation as the housing crash will wipe many of them out. Like I have been saying for weeks now is to look for MANY MORE FIRES in the news as the housing crash gets worse.

You don’t know anything about the RIM executives that got fire. I know the one who lived in Conestogo. He sold his house back in April for avout $830K and moved back to Scotland. His house is now occupied by the new owners. The other executive lives in Kitchener.
The number of houses in Conestogo have not spiked. It always stands about 13-17 houses at any given time. Get your facts straight. I live here and it’s a great place to live. Lots of money here and nothing to do with RIM.

Luv the story about 50% declines. There’s a bottom called cost of construction.

Though I doubt we’ll see BOGO anywhere but Vancouver, what makes you think cost of construction puts a floor under resale prices? If anything, it should put a ceiling on them anywhere that land value lots are on the market.

@124
Car dealers who discover that the the guy trading in his vehicle owes more on the vehicle than the its worth, call these guys “upside downs”. Apparently insurance companies hate car owners in this situation , because their cars have a much higher frequency of being stolen, crashed, or torched.
I agree with you , it should prove to be interesting over the next few years. There are going to be a lot of homes mysteriously go up in flames. Dangerous enough for SFH, but what about all those condos?

Elmer #44
“Adam’s example makes no sense, why would someone buy a house and then sell it in a year? That happens almost never.”
————————————————
Happening right now across the road after 15 months.
2011 – 330k ask sold probably close to ask.
2012 – 369k ask – 2 open house/little reponse.

People get transferred, promoted, break up, go to be with parents/kids.
Happens all the time………

Interestingly enough, arson is starting to become a big problem recently in Halifax. My guess is a lot of people bought up houses/businesses as a method to fuel their retirement in anticipation to the “ships are coming.” Of course, the ships are not coming as strong as we originally thought when budgets are put into consideration. I wouldn’t be surprised to see the project seriously reduced, stalled, or cut out entirely.

The police are of course not doing their homework. They’re blaming “homeless youth gangs” for causing all the fires in abandoned commercial and residential buildings. Why would homeless youth burn down the very buildings they could squat in for the night? The conventional masses truly believe the homeless are this stupid, right? Cops are paid big bucks, do your jobs. The kids are obviously being paid by someone to burn down the abandoned buildings. Perhaps someone, most likely above the age of 50, who failed a flip and wants to collect insurance premiums?

We shouldn’t be surprised, after all, the fall of Rome was caused by a real estate bubble scheme met with arson shortly afterwards.

If Canadian housing prices really are dropping, it would be wonderful if the Feds do NOT meddle like they did in 2009. The Cons are supposed to be laissez-faire free marketeers so this should not be much to ask.

Riding the pine: (warning danger of pine pitch and splinters – don’t try this at home) : Designers just shift focus to owners who can’t move but need to adapt their current home

Mark Hanson says that 50% of American homeowners are “effectively underwater” – they don’t have the money to make up the difference on their mortgage, pay closing costs and put money down on a new house. He says that these homeowners do not renovate their houses.

Think longer term and in wider durations like 5-10 years or 10-15 years — home prices will not correct in 2-3 years. You need to decide if your home is an investment or if you’re willing to pay to consume it. The days of having both are gone for some time.

…..
E Condos has been making Toronto’s architectural elites drool. The pre-construction project slated for the northeast corner of Yonge and Eglinton is striking in its rendering phase, most notably by its pair of cantilever pools halfway up of the paired glass towers. Yes, this is the type of thing you see when you sort your Pinterest feed by “Popular.”

“And the costs just increase from there. While the storage locker price is pretty standard at $5,000, parking for a whopping $58,000 is not. (I’m tempted to calculate the cost of parking per square inch at E Condos, but I fear the result will be overwhelmingly depressing.) Plus, residents who own both a locker and a parking space are looking at spending an additional $2,160 in fees, on top of regular resident maintenance fees. Renting is suddenly looking a lot more appealing…”

“From the latest report, it appears that the lead horse was dead from a heart attack/stroke/aneurysm before it hit the ground. The other two were victims of circumstance.”

Having had little experience with horses, I readily confess my ignorance on this topic. So do you have an explanation for why the lead horse died of a heart attack/stroke/aneurysm? It is my understanding that this is not the first time that this has happened at the Stampede – is it a common occurrence in other environments as well?

Also, you said that the other two horses were “victims of circumstance” – by “circumstance” do you mean “running in the chuckwagon race at the Calgrary Stampede?”

Thanking you in advance for your response,

John

PS I would not describe myself as the “usual horse-set/Toronto/NDP mentality” that you refer to; nor am I “nutjob” who “prays for a trainwreck at the Stampede” or “goes full stupid” over animal rights, global warming, oil, sustainability or any other issue that you want to throw into the kitchen sink. I am interested in learning truthful information about both sides of an issue, and resent having to sift through an onslaught of offensive assumptions and stereotypes in order to get it.

I believe what you say is true.
And even if I could afford it, I would never stable a horse, for the exact reason you state – in terms of lack of consideration for the animal, there’s not much difference between that and the Stampede, IMHO.

Bobby on 07.14.12 at 9:29 am
Looking at condos here in Victoria. Many are empty and have been sitting on the market forever. Have an interest in one unit that has been on the market for one year. It’s price is following the market down.
Recent updates from a realtor show falling prices. Have been to a number. Of open houses. Nobody there.
This is a buyers market. Price your offers accordingly

Good post Bobby, and as soon as someone shows interest in one of these empty condos, the realtor will probably say we have someone interested in that one.

Cy, I lived in Penticton during the spec boom in early to mid 00s. Lots of listings, but prices like Garth said are very sticky. Even though population is down and many industries closed down.

Designers just shift focus to owners who can’t move but need to adapt their current home to future needs.

You can’t adapt to something that is not there. How do you think the $100k kitchen renos and $150k backyard makeovers were paid for? With cash savings? Home owners with vaporizing equity aren’t going to be doing squat to their houses except that necessary to keep them from collapsing. People are very adaptable. They will put up with just about any living conditions if they have to.

One is sweltering in the +40 degree Arizona sun, sleeping with a loaded gun under the pillow, near the Mexican border. Another is on the gulf coast hoping and praying the next hurricane will wipe the property off the map.

One thing you must remember about these so-called environmental groups: They are no friends of the environment, nor any life-form on Earth that depends for its existence on a clean place to domicile and spend all day at a sidewalk cafe reading Jack Layton religious tracts.

When you see these organizations going after the means of production particularly concerning the exploitation on non-renewables, over which their “Centre” has little or no control (oil sands being shipped to China) you can smell the dead rat from a mile away.

To wit: these groups represent an arm of American Imperial Interests, plain and simple (“If we can’t have it, neither can you!).

Just check out the “creds” of the leaders of these primarily US-based groups. They’ve been educated in the same schools as the DC lawmakers and their bosses on Wall Street.

PLEASE NOTE

They generally remain silent on many of the exploitations of resources that are controlled by the Empirical Centre, a la the Roman Empire (late and not lamented).

When the US Empire collapses, and it will in a fetid, dung-filled heap of printed money, expired subscription “.org” forms, handed out by useful idiot environmental whackos on trendy street corners, and empty fast-food containers, its successor empire may shoot these bastards then hire their own new bastards to target some hapless group of whomever it would be because they’re “wrecking their joint.”

This is known amongst the easily disposed of chattering classes (to wit the Bolshevik Revolution 1917) as environmental renewal, or realizing your potential, or multi-tasking, or workin’ for the person.

We are a young family living in richmond hill. Home is mortgage free but in need of some renovation. I am 44 years old, the wife is 38 and the boys are 9 and 3. We would love to stay in the area, yonge and hwy.7 . I have a pension plan at work which should provide between $4800 to $5000 a month if I retire at 60. Wife has rrsps but no money in resps or other investments. A month ago we were offered $930,000 plus we could stay in the house for a year. My questions are: how long would we have to rent a place to make it worthwile to sell? The value of the home is almost entirely land value, so is it foolishness to spend $200,000 on renovations? would love to sell the house and have money to put in resp and other investments but I am wondering if is worth the effort because I would still want to own my own home at the end of the day.

Then you are a victim of your own emotion. The responsible action for your family is to harvest the profit. — Garth

Is this for real? Do these people just make this up? $900,000 plus profit and he doesn’t know what to do?

This puts this couple into the position of being able to save and invest ALL of their after tax pay into income producing assets. That’s right a 100% savings rate!

So find an idiot and off load the house to him or her NOW!

When the RE crash occurs they will be able to RENT any high class digs for a song.

It would be inappropriate for me as an American to bitch slap this guy into using common sense. I’ll let you guys up north take care of your own.

Think longer term and in wider durations like 5-10 years or 10-15 years — home prices will not correct in 2-3 years. You need to decide if your home is an investment or if you’re willing to pay to consume it. The days of having both are gone for some time.
_____________________

Watchdog,

if it is a bubble, then it does not take 5-10 years to correct.

You know stocks. So The 1/3 rule may apply here. Bear market only takes 1/3 of the bull market time to correct the excess.

Yes it is looking like a rerun of 2008 for the housing market in the GTA . Sales just froze up and it happened before the mortgage rule change. I to have noticed the increase in empty home fires are becoming very frequent just like in 2008. To think sales are even worse then what the RE industry is saying since they compare them to the revised numbers and now against the inflated numbers of the year pasted.

If the Toronto condo market crashes, what will HGTV do for programming?

Down here in the sticks (Middle US of A) , we could not BELIEVE what the Property Virgins were doing to themselves. Prices down here at the peak were crazy, but the Toronto market, based on what we saw on HGTV, was/is bug-eating nuts.

We used to see the Rinomato show and we marveled at how she would convince a couple of 25 year olds with practically NO assets that they really could—and SHOULD—set their ‘budget’ for a house at $500,000—-and then weasel them into coming in with their ‘best offer’ or even going OVER ‘BUDGET’. (“Hooray, you bought a house!”)

From what I read here, it looks like those shows will be over for quite a while.

It’s just as well. I thought I’d hurl if I saw another Prince & Princess wrinkle up their noses and ‘gut’ a perfectly serviceable kitchen that they wouldn’t cook in anyway.

My dentist office used to be PACKED, now its EMPTY. I used to get charged with extra fees but now on my last visit I said that I want that fee removed — and they agreed ! I have NEVER had that happen before !

So yes, with no business in his office, either his fees will be going down dramatically or he will be out of business before the end of the year. I think the later is more likely.

All over the place around K-W I see ‘SOLD’ signs on houses, yet on business i see ‘for lease’ or ‘70% off’. What’s up with that?

It is my feeling that America is now ENTERING A JAPAN-STYLE LOST-DECADES DEFLATION: Read up on what happened to Japan and prepare for the EXACT SAME THING to happen to America over the next 20 years, maybe more. And if America suffers then most likely so will we, about 5 to 8 years later.

–
#104 TurnerNation — “Witness NATO’s latest multi country invasions. US/Canada/Mexico may well be merged into one wretched, fetid, low-wage economic zone. Ditto, the EU.”
— which goes with —
#109 TurnerNation — “I’m sure the elite have already divided the world into proposed Wage Zones . . . and measures to take to control/sell the population on it.

“USA: $15/hr manufacturing zone
East Asia: .50/hr
India: $5/hr”

Then TPTB skim off 90% from the top for their own well being, leaving us to fight for the rest. That being said, however, everything — including fiat money, ponzi schemes and the like — must run their course here.

#128 boomorbust — Having been a Catholic and Anglican for just shy of two plus decades, the prophecies of St. Malachy appear to be bang on, which means that the negative force (the devil, Satan or Lucifer, whatever you want to call it) is using the present pope’s body as a physical vehicle.

Tony Blair was an Anglican who converted to Catholicism is in the article as well, also appears to be a somewhat evil person, hiding behind the famous smile of his. The negative force is simply the opposite half of the positive force. Both must maintain an equal footing in the lower psychic regions and therefore, there is no reason to bother following any of the m$m drivel. That is one way the negative force uses for a convenient tool. It works mainly through politics, organized / orthodox religion and banking, such as here and Bounty Hunters set loose on crooked banxters.
*
The Stones are soon going to be on the road again, for the 694th century in a row. Nice to see what they can still do!
*Taking Us To The Brink Banxters; John Mauldin The Beginning of the End Game, plus other stuff; Super Elite Civil liberties are mostly gone in the west; Payday Loans are not the greatest of ideas; Dropping Like Fruitflies;Soros / Obomba have quietly changed the US from a welfare state to a police state; 26:54 clip Austerity cuts bringing EZone to a shuddering halt; Minimum Wage Scranton’s mayor, police force, fire depts. etc.; JPM and Dimon Interesting question. Birds of a feather . . .; How the rich are takiing over America, offshoring their work and pocketing the profits; US$ and Euro Par for the course; Chart The French Revolution led to the collapse of the French bond market; Libor All coming out in the wash now.
*Th CPC This is who we voted for; Wikileaks Another one to miss; Might Makes Wrong in the SoH; 4:16 clip If TSA scanners were bad, look what’s coming; Japan HAARP’s working overtime, and 2:03 clip China’s storms follow Japan’s evacuations; Romney – dubya – Cheney Aligned with war; Lifecycles Plenty are long, some are short, and Growing Pains;Jaws still exists; Drug Tunnel between Mexico and US (one of many); Isn’t this surprising The CIA is involved with Syria. Well I never! Satan Ummm, not quite.

64 TRT/117 Cy. The $15K/acre figure sounds about right as this is what improved pastureland sells for in my area of VI. As these farms are typically big dairy, I suspect the milk quotas leads to a more stable land value. I have heard higher values for vineyards, but I suspect this
must be with improvements or vines in place. The cited values of $100K+ make no sense.

Almost all productive farmland in BC is within the Land
Reserve. It derives its value totally from the revenue that it can generate directly from crops, or indirectly from the
livestock it supports. Of course a homesite has value, as
does the “second acre” upon which residential
improvments can be built, but after that it’s $X/acre. Just down the road, a friend has listed his place (12 ac in ALR with house extremely beaufitul setting) for 1.5M, while in fact it may be worth half that.

Also keep in mind that if the land is in several titles, each can support a dwelling, increasing value significantly from equal area in one large parcel.

W’ere were you when an elitist lady of the environmental .org persuasion was interviewed on one of Canada’s TV networks awhile ago?

She was excoriating an energy industry spokeswoman who had dared to challenge this apparently always-to-be-criticism-free .org group for “organizing the locals” in northern BC about the “evils” of the Enbridge pipeline proposal.

In the end, it’s always the locals who get screwed:
either by the “big bad corporation” or the “virginally-pure environmental .org” nightmare.

Oh, yes, this environment lady; she seemed mighty uppity to me, talking down to the TV host, and thus the audience in one swell foop. She seemed most disagreeable, or else I simply did not believe a thing she said such was her unctuousness (check the OED!).

I have no problem with all parties coming to the table, but beware of greenies bearing gifts. They are a skivvey lot. Pure as the driven snow they’re NOT.

Gold bugs? Yes, owning gold instead of stocks and bonds over the last 30 years was a superior-returns proposition by a country klick, alright. Yepper. And gold is still a good investment, or why else would major sovereign entities still be buying the stuff?

Tip of the iceberg indeed. I can tell you by the sentiment of many on this blog who are ready to dive in a 15-20% correction will get smoked; just like recent buyers in the U.S. are right now as foreclosures and shadow inventory rises.

A real correction can be easily quantified when balance sheets are healthy again and productivity rises. Until then, the market will be a wasteland.

It is my feeling that America is now ENTERING A JAPAN-STYLE LOST-DECADES DEFLATION: Read up on what happened to Japan and prepare for the EXACT SAME THING to happen to America over the next 20 years ………….
the exact thing will not happen. Deflation of debt will occur however monetary inflation has ocuured in the US and this WILL result in massive price inflation for most goods that are needed for daily living. Reasoning? US has a massive printing press and a lot more foreigners owe the debt. Not so in japan.

Sounding kind of defensive there about Conestogo. I’m curious as to where the money comes from. Apart from UWaterloo and RIM, I don’t see a ton of high paying jobs in that general area. (And I do keep an eye out, as I really like K-W. It seemed to me that the price of housing was out of sight compared to rents or salaries).

You know, I expect that from any realtor. It is the oldest and saddest approach from any salesperson. But for some it still works.
My first offer is always my last one. Recall a colleague who once made an offer, but it was declined because of a supposed better offer coming. Colleague failed to counter much to dismay of both realtors. When it was clear there was no other offer made, he made another offer, but at a lower price. Seller then accepted his first offer, but his response was that it was off the table, this was his new price. He got the house at the lower price.

“My question would be then what is the time frame in the gta for the valuations to return to the point were home ownership makes sense? Is it a 2 or 3 years proposition, or is it a much longer term situation says 5 or 6 years?”
—————-

I still find this kind of question hard to believe.

The answer has not changed. Whatever forces that caused the “valuations” to go up, will be the seeds of it’s collapse.

Are you aware of how Canadian real estate prices went up? I am. Lots of people are. How about the bust? Why would that happen? What do you think it would take for prices to “come back” given that first question?

Thing is, you have to be willing to face the reality of the first question. It’s now no longer opinion, and as this thing unfolds, the answers to the other questions are simple cause and effect relationships now visible and out in the open.

You obviously have an internet connection. Why not use it? It’s quite a privilege. It took a few years to realize I had unsubstantiated “Canadian” belief systems screening out information I needed for strong judgment.

It takes a while…and it’s always best to start as soon as you can. I actually turned off my TV for 10 months to help.

Your question demonstrates that you haven’t done any homework, and are hoping others will do that for you. A bad and costly decision.

#111Karie
The Kayaks have changed the lifestyle already. We no longer go to the pool on Saturday and Sunday but add 3-4 hours to Kayak and enjoy awesome times on secluded beaches & sandbanks on the Ottawa River or Lakes Ottawa/Gatineau. The owners of homes pay a premium for their Real Estate – I don’t. For 3-4K, we now have a sport and outdoors activity for 10+ years. And from what I’ve seen, resell value of Kayaks are awesome. The homes, so far seems really good … so we won’t buy at these prices.
I’ve told my kids they should be grateful that we have these Kayaks and get to these awesome places. They sure seem to enjoy it! I could get a motor boat but that’s just not healthy for us or the planet. My young kids love kayaking, beaching and sand banking.

I’m sure to get a new contract soon … I have good soft skills and hard technical skills. So I love when contracts end in summer. If I don’t have a new contract, I do have some business ideas and would simply have to market does – but with 3 kids under 7 “I’m lazy” these days or just enjoying my family life. Consulting is the easy way for a balance life. I guess a job is as well but both parents have to work then.
The frugal lesson is something I do intend to instil. From what I can see, boomer kids are leveraging too much for too little. My kids will wait for the trough to buy.
As for what I will do ….
Less than 3 month with no contract = be on vacation.
More than 3 month with no contract = be frugal
+6 months with no contact = move to the log home and tinker on the next business idea so I can stay at the log home.

Real estate bubbles do not unwind like stock bubbles because house prices are “sticky” on the way down. Meaning sellers will refuse to lower their price, then begrudgingly later re-list at a lower but not low enough price, so again it sits unsold. Repeat this process over and over and eventually houses start to clear. The typical real estate bubble takes 5-6 years to unwind.

Calculated Risk covered the topic of sticky house prices back in 2007. In this post David Lereah of the NAR was quoted as saying this is is just temporary, everything’s good. We know how that turned out:

Housing is the most emotional asset. People refuse to believe their beloved house could be worth less than some imaginary value they have in mind, which is often a function of what a house down the street sold for last year, or what their mortgage is plus plus, or what they paid for it plus all their buying and selling costs etc etc. People have trouble accepting that their house is only worth what it can sell for, and not a penny more.

I’m not being defensive however Mr. Rim Watcher doesn’t know diddly squat as I observed with his ridiculous post. Conestogo has always been expensive. The house we purchased in 2008 was bought by the previous owners for $400K in 1993. That was a lot of money at that time and Rim was just created in 1992. All my neighbours are very affluent mostly professionals (none work at RIM) and sucessful business owners. I think it’s espensive here is that it has the country feel and a lot of the lots are very large and private. It’s 5 minutes north of Waterloo so shopping is convenient. I wonder why Mr. Rim Watcher is driving here in the evening looking at former Rim employees houses that are dark. Weirdo.

What isn’t being taken into account when talking about ‘markets doing nothing for three years’ is the fact that this statement isn’t entirely true. The suckers ‘buyers’ have been paying massive interest charges of tens of thousands a year ( and that ain’t ‘equity folks’ while the ‘value’ does nothing or drifts down by painful increments in a death spiral we like to call ‘the death of a thousand cuts’.

Neither is the strata fee they pay…in some cases as high as .50 cents per sq ft….’building equity’.

Property taxes….another cash gouge is a dead loss on the balance sheet of real estate diddles.

There is only one instance when buying real estate is a good idea……thats when the market is going up……if you look out the window and see that RE is failing…….step away.

Bwahahahahahahahaaaaa

But…….the civic servants ( like they did when they got caught up in the leaky condo scandal in Vancrapper)….have been quietly granting themselves immunity from prosecution so that none of these sleazy scumbags will ever take responsibility for the demise of democracy in Canada.

Garth hates to repeat questions that are constantly being asked. So I’ll answer it for you. Yes!!! Garth has pointed out before that these are good to buy. Just look at the graphs. Up, up, up!!! REITs & etf rulz!!

We do not like to think of ourselves as potentially irrational herd animals (that will be the Jones’s). We seek narrative frameworks that purport to explain our good fortune, ideally in ways that flatter. Reinhardt and Rogoff called it the This Time It’s Different syndrome as each age sought to deflect warnings by arguing we’re smarter now, better organised, or living in a different world.

Just as the sellers of an overpriced home will convince themselves that it was their interior decorating skills not an inflating bubble that got them the good deal.

Of course warnings may keep coming, and almost by definition, from the fringes. When assessing risks that challenge consensus, people are more likely to defer to authority, which generally sees itself as the representative of the consensus. Furthermore, as a species with strong attachments to group affirmation, being wrong in a consensus is often a safer option than being right but facing social shaming, or especially if found to be wrong later.

But even if we can appreciate a warning, the inertia of the status quo generally ensures acting on such warnings is difficult. In general we chose the easiest path in the short-term, and the easiest path is the one we are familiar and adaptive with. We would rather put off a hard and high consequence decision now, even if it meant much higher consequences some time in the future. However, if each step on the path of least resistance is a step further from where we ideally should be, the risks associated with doing anything rise as the divergence is so much wider. Eventually one’s bluff may be called, but not yet, and hopefully on somebody else’s watch.

The consensus can often be correct and the marginal voices may be deluded.

The point for the risk manager is to try and step through cognitive and social blind-spots by first recognising them. This is particularly true if the risks (probability times impact) considered are very high.

Unfortunately, it is very clear that we have learned almost nothing general about risk management as a societal practice arising from the financial crisis. We have merely adopted a new consensus, with a questionable acknowledgement that we will not let this type of crisis happen again.

Keith Roy (Vancouver Realtor that’s been plastered all over the news because he said Vancouver might go down in price)

“As for buying back in, I am less worried about the price of the home I purchase, as I am about whether or not I can afford it on a monthly basis – which is how most people buy homes. Once the price of the home I want gets to a point where I can afford it on a monthly basis, I I will likely buy back in. If the prices go down further, but interest rates go up, my monthly payment will remain the same. Monthly payments are the primary metric by which I will be purchasing a home. In my case, I needed to get the cash out of my place before buying the next one and the timing looked good. I think my strategy was good advice for my situation, so I shared it with others”

Great link on the underpinning of how the Toronto real estate market got used in another chapter of the middle class wealth transfer. Thanks for posting it. It sucks to have to get most real info from doomer sites, so this is great.

It also answers the question on “when” the Toronto
( GTA) market will recover.

Turns out that it’s not the right question.

“But JP Morgan turned a profit this year”.

Nice eh? Not everyone is in the dark…

If there isn’t a desire to tackle what’s really going on now, the real question is …..when?

“Once the price of the home I want gets to a point where I can afford it on a monthly basis, I I will likely buy back in. If the prices go down further, but interest rates go up, my monthly payment will remain the same. Monthly payments are the primary metric by which I will be purchasing a home…”

total idiot

– — –

He’s paraphrasing ‘it’s always a good time to buy’.

Such ‘creativity’ in that ‘profession’. lol

The flaw in his ‘logic’ is that if he buys he’s locked in at that price. If it drops further he still owes the higher purchase price, not the lower market value. And if interest rates go up, then so do his payments.

Confused by this surprise at this “American arresting Canadian in Canada” stuff. Didn’t they arrest Marc Emery nearly ten years ago, and then demand his extrication to the States where he’s now serving a 5 year sentence for something that’s barely a crime in Canada?

You are failing to defend your comparison between bikers and the Stampede.

We went to the chucks for the first and last time in 2011. On the second circuit one of the horses fell, and in quick time, the black tarp came up — we knew what had happened, and had to explain it to our son. He wanted to know why the horse died. Why indeed.

The owner of the dead horses this year appeared on the news quite upset about how the horses were part of his ‘family’ and how he couldn’t believe this had happened to them — ummm, YOU SIR put them into the position in the first place. If they were such valued members of your ‘family’, why did you put them at such risk. Oh right. For money and cowboy glory.

Sad. The Stampede is a dingy Bill Lynch Fair midway with no morals and awful behavior.

And IM in C — try coming up with an original moniker. I’ve been here and posting with this for more than four years now.

Fire crews responded to a call on Front Road in the Liverpool Road and Bayly Street area around 7pm yesterday.

Police say the home caught fire from a backyard barbecue and the flames quickly spread to the house.

All the people in the home got out safely.

Damage is estimated to be around 1-million dollars
———————————————————

What the media left out was the owner was AWAY and the HOUSE SITTER was only one there. The housing crash has just got started and there have been multiple fires in the GTA every week. Keep your eye on the news for many many more `fires“ as people who can not sell and about to go bankrupt burn their homes down. It`s going to be a nasty housing crash.

Okay…
I’m a born and raised Calgarian. For clarification – you remember Hickstead…no? Well, he was the warmblood that belonged to Team Canada Olympian Eric Lamaze. Hickstead died of an aoritic rupture while competing in Italy. Um…that’s the same thing that killed the lead horse at the Stampede recently. Unfortunately, other horses were involved in the resulting crash and lost their lives. No one took up arms to ban compettive showjumping when that happened to Hickstead but suddenly chucks make us barbarians? Here, I have an idea! Why don’t we ban all horse sports seeing as how they are clearly so terrible for the animal. That includes horse racing. You know the Kentucky Derby? Let’s just cancel that.
For those of you who don’t know this….the Stampede is a celebration of Alberta’s Western Heritage. Calf Roping??? Yeah, that’s a real thing that real cowboy’s and cowgirl’s sometimes have to do when they, you know, ranch and raise cattle.
I own a TB that came off the track…she lives in a stable. She is sensitive to bugs and temperature changes (much to my chagrin) and is happier and more relaxed staying indoors overnight and being turned out during the day. I’ve had other horses that were fine outside all year round. Believe it or not, horses have individual personalities and their owners do recognize and accommodate that. Ergh…this topic frustrates me more than Canada’s real estate situation.
To every one of you who thinks it’s barbaric I ask you this – do you eat meat? Is it not more barbaric to raise an animal for the sole purpose of your personal consumption? .99 cent burgers are clearly more important than the life of an animal when you need a fast food fix. F*cking hypocrites.

Thanks to your guidance Garth, I sold my Vancouver condo last fall and started renting a nicer place across the street for $800 less a month. Between what I was paying in interest, taxes, utilities and condo fees pretty well equals what I am no paying in rent and I have no risk. I love being a renter and being able to sleep at night.

I took some of the equity and bought a Palm Springs 2 bedroom condo for 46k cash. It’s probably an ok investment as other units in complex are selling at double the price. However, the taxes condo fees and leasing hassles do add up and I am not sure I would do it again. However, I must admit I do enjoy a few months in the desert each winter.

Thanks for the great advice and I wish I had read your US real estate advice sooner!

No #205 superbubble, Canadians are not the dumbest people, they are the meekest people, hoping to inherit the earth no doubt but anyway, went for a stroll this afternoon and can report that the streets in my hood are beginning to show some color again and it’s not the lawn signs of the pols prior to an election but the open house signs of the realtors, everywhere! It’s coming, it’s here! Hallelujah!

As with #94 Van Isle Renter: thank you for presenting a different perspective. And since you obviously know more about this subject than I do, perhaps you could answer a question that arises naturally from your post: how many horses have died in showjumping as opposed to chuckwagon racing? Expressed as a percentage of total number of participants, of course.
(I asked Van Isle Renter a similar question and have not yet received a response.)

And two comments related to your post:

1. You said, “I have an idea! Why don’t we ban all horse sports seeing as how they are clearly so terrible for the animal. That includes horse racing. You know the Kentucky Derby? Let’s just cancel that.”

Fine by me.

2. “Is it not more barbaric to raise an animal for the sole purpose of your personal consumption?”

That’s a topic for discussion. Personally, I feel that raising animals to entertain humans (circuses, cockfighting, horse racing, dog fighting, Calgary Stampede, etc.) is more barbaric — but that is open to debate.

And if you hadn’t lowered yourself by referring to me and others who might choose to disagree with you as “f*cking hypocrites”, that debate might actually have happened.

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The views expressed are those of the author, Garth Turner, a Raymond James Financial Advisor, and not necessarily those of Raymond James Ltd. It is provided as a general source of information only and should not be considered to be personal investment advice or a solicitation to buy or sell securities. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor's circumstances and risk tolerance before making any investment decision. The information contained in this blog was obtained from sources believed to be reliable, however, we cannot represent that it is accurate or complete. Raymond James Ltd. is a member of the Canadian Investor Protection Fund.